The Donohue Company

Greece is in a bad way. The financial debacle now unfolding in that country has managed to push the maladventures of N.Y. congressman Weiner off-stage and off-camera. After weeks of negotiations with the European Central Bank (ECB) and the International Monetary Fund (IMF), Prime Minister Papandreou  faces the herculean task of getting parliament’s approval for the draconian austerity measures required by creditors to avoid a sovereign debt default by the end of June, 2011. Read More »

It is quite important to a business to establish a stable business location. Short term leases provide the tenant with an opportunity to test the business and the location but expose the owner of the business to a relocation if a satisfactory lease extension cannot be negotiated. Failure to reach a satisfactory agreement results in forced relocation of the business which is always disruptive and expensive. Read More »

In the summer of 2008 I was invited by an ex-student, who is a real estate broker, to speak at a seminar he was promoting in Dublin. His message to the attendees would be that the streets of Miami were really and truly paved in gold and that condominiums would be a very rewarding investment for the increasingly affluent Irish investor. His enthusiasm for his own ideas seemed to fog over the fact that there were, at that time, more than 22,000 condominiums under construction in the metropolitan area. Try as I might, Read More »

It should come as no surprise to the serious investor that the purpose of investing in real estate is the attainment and preservation of wealth. The investor attains wealth when the net income of the property is greater than the cost of servicing the loan thereby leaving a bankable net profit. Read More »

Investors who are new to income-producing properties often ask: " How does a commercial lender underwrite a loan?"

It’s a good question, because if one understands how the commercial lender decides on the amount of money he will lend on a commercial property (multi-family properties greater than 4 units included ), a prospective borrower has a chance to assemble a loan package which is attractive to the  lender and thereby improve chances to obtain a good loan. Read More »

Commercial and multi-family real estate investors are finding it more and more difficult to obtain adequate financing at reasonable rates. As a result, a variety of data sources indicate a reduction of 65-80%  in 2008 vs. 2007 total transactions.

One of the most significant causes of the credit crunch has been  the near disappearance of new Collateralized Mortgage-Backed Securities (CMBS) securitized by commercial and multi-family mortgages. Until now CMBSs have provided a robust and much needed secondary market for loans on commercial and multi-family properties. But Read More »

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world, no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.”

— President Woodrow Wilson, in reference to the
Federal Reserve Act of 1913, which he signed into law. Read More »

Most of us have heard the story of the farmer who bought a mule from a mule dealer. When he got it back to the farm he found that the animal would not obey any command: giddyap, whoa, gee or haw.  So he took it to the mule dealer and demanded his money back. "You just don’t know how to manage him," said the dealer, who promptly picked up a two-by-four and hit the mule over the head. "The first thing you’ve got to do," explained the dealer, "is to get his attention." Read More »

It’s very reassuring to have an uncle who will back you up on all your risky investments – that is, only if you are his niece . But it must be very disconcerting to know that your uncle is gender-biased and will not back you up if you are his nephew .

But if you are his nephew and do make a risky investment and – lo and behold – your uncle comes to your rescue, then Hooray!! The problem will not be that you will dissolve into bankruptcy, but that all your uncle’s other nephews may come to expect the very same treatment. Read More »

Investors contemplating an exchange of properties under I.R.C. §1031 frequently inquire about the length of time a replacement property must be held before one can use the property as a personal residence. Until recently, the IRS has given no clear answer to the question. Now, however, Revenue Procedure 2008-16 offers some guidance not only for properties to be acquired (the replacement property) but also for properties already owned (the relinquished property). Read More »